China raised its US Treasury bond holdings by US$38 billion in May to a total of US$801 billion, the Dow Jones reported. Beijing’s move was in contrast to the reduced appetite for US debt among other foreign investors. Russia and Japan sold off US$22.5 billion in Treasuries in May, compared with net purchases of US$41.89 billion in April. China’s increase means that China now holds 20% of US Treasuries held by foreign central banks, more than Japan and Russia combined. The purchases are a relief to US policy makers who need liquidity to plow into economic stimulus. However, China’s new purchases are primarily shorter-term instruments that mature in a year or less, indicating China’s public statements questioning the long-term prospects of the US dollar are being implemented in economic policy. The dollar lost 7.2% against the euro in May over concerns that the US stimulus plan will cause further devaluation of US currency.